Generic LIPITOR - the Brass Ring of All Brass Rings for 180-Day Exclusivity; How Will Exclusivity Resolve?

By Kurt R. Karst

2011 is shaping up to be an interesting year in the Hatch-Waxman world, and all eyes seem to be focusing on what will happen with Ranbaxy’s purported (sole) 180-day exclusivity for a generic version of the mega-blockbuster drug LIPITOR (atorvastatin calcium) Tablets. Will Ranbaxy launch in November 2011 (pusuant to a patent settlement agreement) and trigger its pre-Medicare Modernization Act (“MMA”) 180-day exclusivity? Will the exclusivity remain “parked”? Or will the company be stripped of its exclusivity or otherwise work out a deal to relinquish it? A recent BernsteinResearch analyst report tries to address these questions and more.

As we previously reported, Ranbaxy has had good manufacturing practice problems with FDA that could stall Agency approval of the company’s ANDA for atorvastatin. In February 2009, FDA announced that the Agency was taking the unusual step of invoking its Application Integrity Policy (“AIP”) against Ranbaxy’s Paonta Sahib, India manufacturing facility. FDA takes such regulatory action under the Agency’s AIP procedures when FDA believes that a company’s actions raise significant questions about the integrity of data in marketing applications. Importantly, FDA notes in the AIP letter with respect to pending ANDAs that:

In accordance with FDA policy, the Agency will assess the validity of the data and information in all of Ranbaxy’s affected applications which contain data developed at the Paonta Sahib site. . . . This means that the Agency does not intend ordinarily to conduct or to continue its normal substantive scientific review (including review of data and labeling) of any such pending application or supplement, or of any new application or supplemental applications filed after the date of this letter, that contain data developed at the Paonta Sahib site, during a validity assessment of that application.

Ranbaxy’s atorvastatin ANDA is widely believed to be out of the Paonta Sahib facility; however, Ranbaxy has never confirmed this. If it is, as many believe, then the application could be blocked from approval and generic competition (other than an authorized generic) stalled.

According to BernsteinResearch, there appear to be three possible outcomes in this case:

The highest likelihood is that Ranbaxy will be able to launch generic Lipitor (fully or partially) on time. This would require some sort of resolution of a very challenging regulatory situation (Ranbaxy violated an honor system). However, (i) Ranbaxy will do all it can to resolve the issue (we see the recent departure of Ranbaxy CEO as related), (ii) a solution is best for the public wallet and (iii) may also be organizationally better for FDA (avoids lawsuits and negative attention). We can see a compromise solution like transferring the application to a new manufacturing site as possible.

A less likely possibility is that Ranbaxy is delayed holding other generics off. This is the most likely result if Ranbaxy can’t launch. . . .

The least likely scenario is that [the] Ranbaxy ANDA file is disqualified being of insufficient quality (as the result of potential fraud). . . . If [the] Ranbaxy ANDA is invalidated, the exclusivity is lost . . . .

Although BernsteinResearch favors on an on-time launch scenario in November 2011, the report hedges and notes that “all paths depend on FDA willingness to work with Ranbaxy to approve Lipitor out of its facilities and we are uncertain FDA will do so.” As an aside, BernsteinResearch notes that Ranbaxy could relinquish its 180-day exclusivity, but that the company “does not have commercial interest to do.” (A selective waiver is not possible unless 180-day exclusivity is triggered by a relevant court decision or after ANDA approval and commercial marketing.) Given the headaches atorvastatin 180-day exclusivity could cause FDA – think lawsuits and citizen petitions – one has to believe that the Agency would rather see the whole mess go away with a relinquishment.

An early view on generic LIPITOR could have come earlier this year in the context of generic FLOMAX (tamsulosin HCl) Capsules; however, 180-day exclusivity was forfeited. In that case, Ranbaxy was reported to be a first applicant eligible for post-MMA 180-day exclusivity with respect to the only Orange Book-listed patent – U.S. Patent No. 4,703,063, which expired on October 27, 2009, and the pediatric exclusivity for which expired on April 27, 2010. FDA tentatively approved Ranbaxy’s ANDA No. 77-451 in June 2007 – and it remains the only tentatively approved ANDA for generic FLOMAX (8 other ANDAs have been approved). It is unclear whether Ranbaxy’s inability to obtain final approval for ANDA No. 77-451 is due to FDA’s AIP and whether information supporting the ANDA file was generated from the company’s Paonta Sahib facility. This is reportedly the case, but the basis for this report is not known.

The BernsteinResearch report identifies another “early view” case that could shed some light on “the Lipitor situation” – namely generic ARICEPT (donepezil HCl) Tablets. As we recently reported, Ranbaxy’s ANDA No. 76-786, which is tentatively approved, could be up for final approval on November 25, 2010 after the expiration of U.S. Patent No. 4,895,841, to which Ranbaxy submitted a Paragraph III certification. Ranbaxy holds pre-MMA 180-day exclusivity based on Paragraph IV certifications to later-expiring patents. Like atorvastatin (and tamsulosin), Ranbaxy’s donepezil is believed to be out of the Paonta Sahib facility. “A solution to the Aricept situation if found, may serve as a model for Lipitor,” according to the BernsteinResearch report.

And what about the “nuclear option” – rejecting Ranbaxy’s ANDA and stripping the company of its 180-day exclusivity? Then FDA “will almost certainly be sued by Ranbaxy” or Pfizer or an authorized generic distributor, according to the BernsteinResearch report. But it could be a “damned if you do, damned if you don’t” situation for FDA, because “if FDA does not invalidate the application, it may be sued anyways by other generic filers seeking rejection of the filing.”